trading capital

Trading is one of the most lucrative business in today’s world. Those who have proper knowledge about the financial market are easily making huge money by trading the live asset. However, mastering the art of trading is not so easy. You have to develop your mentality and start embracing the losing trades on a regular basis. Most importantly, you need to have a balanced trading strategy to trade the live asset. Let’s imagine you know all the details of this market. So how much money you can make a profit this market? Or, how much money do the professional traders make? To be honest there is no exact answer to this question. We are going to highlight some key information regarding the profit factors in the trading business.

Size of your trading capital

The first thing which you can consider to find the profit factors of the successful trader is the size of their account balance. A trader trading the market with $1000 will make a very small profit compared to a trader who has $100k in their account. When it comes to a percentage, earning 2-5% per month is considered to be excellent gain. Some of might be making more than 10% per month but it's only because you have a small trading account. Never expect to earn such amount when you start to trade the market with big trading capital. With a bigger investment comes a bigger risk.

Skills of the traders

The experienced traders in Hong Kong prefer to buy stocks with Saxo based on simple logic. They never make things complex in the trading business. Success lies within simplicity. You can’t analyze all the important variables in the market at an extreme level of volatility. For instance, those who trade the news, often have to execute a trade based on logic. Do you think they can assess all the factors prior to their trade execution? The simple answer is no. But this doesn’t mean they risk more than 1% of their account balance. Losing or winning is completely unpredictable. Once you start following the rules of investment, you can easily make 5-10% gain every month. To be precise, the amount of money which you will make greatly depends on your skills. A skilled trader is likely to make more money than a newcomer.

Preferred trading strategy

Profit factors in trading business greatly depend on the trader’s strategy. A position trader is most likely to make less money than a professional scalper. They are also taking less risk in each trade which makes trading much easier. On the other hand, the professional scalpers are even taking 3-5% risk in each trade to make a decent profit from this market. They also trade the market with low-risk reward ratio which makes things really hard. This will never be a problem for the traders who have a high win rate. So, if your trading strategy is capable of winning more trades, you are most likely to make a huge amount of money by scalping the market.

Leverage used by the trader

Leverage is a double edge sword. It gives retail traders the power of buying. Even with a small trading account, you can easily execute big trades to make more money. But the experienced traders always suggest that rookie traders, trade with a low leverage trading account. Never take unnecessary risks to make more money from this market. Try to follow the conservative trading technique to change your life.

By now you should have a clear idea about the profit determining factors. So, based on your need, you can bring change to your trading strategy to maximize your profit factor. But no matter which trading strategy you follow, never risk any amount that you can’t afford to lose. Trade within your comfort zone to become a better trader.